From
Bureau of Economic Geology, The University of Texas at Austin (www.beg.utexas.edu).
For more information, please contact the author.

AAPG Annual Convention, Houston, Texas, April 9–12, 2006

The Future Lies in Talent and We Must Act Now

Scott W. Tinker

Abstract:

The major international oil companies (IOCs) face a significant dilemma.
Their greatest assets—reserves, technology, and talent—are
drying up.

In terms of reserves, the IOCs combined own only a few percent of the
world’s conventional oil reserves; national oil companies own well
over 90%. This helps explain why many IOCs have been merging; too many
companies, too few accessible reserves. In order to replace reserves,
IOCs are forced to explore on Wall Street. Wall Street has become a mature
province.

There was a time when the IOCs could offer technology to the world. That,
also, is changing. In part because of ever-greater pressure from Wall
Street to focus on short-term performance, investment in private sector
research has been greatly reduced. Research labs have closed. Service
companies today account for an ever-greater percentage of the research
and technology investment.

Finally, there is talent. Prior to 1973, when oil and natural gas prices
were stable, enrollments in science and engineering programs were stable.
Students saw energy as a viable career option. Following the supply embargo
of 1973, demand for talent was fierce. The industry overreacted, markets
overreacted, and colleges and universities overreacted. What goes up must
come down. From 1982 through 1999, the industry and markets overreacted
in the opposite direction, and universities followed suit. Jobs were lost,
research labs closed, student enrollments in geoscience and engineering
plummeted to 40-year lows and many US-based resource engineering and geoscience
departments closed their doors. More importantly, in US Schools, an ever-increasing
percentage of student enrollments are non-US.

Today, National Oil companies from Latin America, the Middle East and
the Far East are approaching US schools with great passion to put partnership
programs into place to educate their students in the US and return those
students home.